SUSTAINABLE SUPPLY CHAIN SUPPLY CHAIN COE SUBMISSION Under the guidance of Prof.Amandeep Singh Grover SUBMITTED BY: RITUPARNA NEOG (24),Xerox present headquarterNorwalk, Connecticut, US. SURABHI SAVITA (33), NIFT-MFM, NEW DELHI
Introduction Large global company: Financial services & Document Processing Products marketed in over 130 countries Direct sales force: 15,000 (dealers, distributors & agents 30, 000 technicians employed for after sales services. 22 manufacturing facilities in Europe, N & S America and in Far East. Its “Ready for Real Business “ campaign emphasizes that Xerox will drive “Non Core Business Processes” allowing its clients to focus only on ‘ real ’ business operations
Xerox –at a glance Founded in 1906, Rochester, NY, US. headquartered in Norwalk, Connecticut (moved from Stamford, Connecticut in October 2007.. PARC founded in 1970. Incorporated in 2002 as an independent centre. Fuji Xerox was established in 1962 as a 50:50 partnership with Rank Xerox. PRESENT Key people -Ursula Burns, CEO -Anne M. Mulcahy, Chairman Employees 53,600 (2009) 9,400+ patents(2009) $880 million spent on R&D (2009) Xerox locations-160 countries. On September 28, 2009, Xerox announced the intended acquisition of Affiliated Computer Services for $6.4 billion.
Mission & Goals MISSIONTo develop, manufacture, market and service a broad range of documentprocessing products including large scale electronicprinters,duplicators,copiers,work stations, engineeringproducts, telecopiers and supply associated with those products. GOALS Customer satisfaction Return on assets Market Share Employee Satisfaction
Industries itservesEnergyFinancial ServicesGovernmentHealth CareHigher EducationHigh Tech andCommunicationsInsuranceManufacturingRetail and Consumer ProductsShipping and LogisticsTransportationTravel
Route Map Logistics customer satisfaction 20% inventory 100 %11% Logistics cost % of revenue 10% 7% ? 1989 1990 1991 1992 1993 Unit Process Optimization Cross-organizational process Change Change Agents
Strategic Partnership- ‘Close the Loop’•In late 2010, Xerox partnered with Close the Loop, one of the worlds largestrecyclers of imaging supplies that specializes in cartridge returns.•Close the Loop collects U.S. customers’ returns and manages the recycling on behalf of Xerox using a patented material separation process that recovers usedmaterials for reuse in new printer cartridges and other products.•These processes enable virtually all material returned through the program to be beneficially managed.•This partnership both simplifies the returns process for customers and also allows more of the return stream to be recycled into useful products.
Features of Closed loop supply chain• Closed-loop supply chain: supply chains that are designed to consider the processes required for returns of products, in addition to the traditional forward processes.• These additional processes (also referred to as the reverse supply chain) are:• Product acquisition: the task of retrieving the used product. This is a key to creating a profitable closed-loop supply chain.• Reverse logistics: the process of planning, implementing, and controlling the efficient, effective inbound flow and storage of secondary goods and related information opposite to the traditional supply chain direction for the purpose of recovering value or proper disposal.• Test, sort and disposition: testing and sorting the returns and disposition refers to how a product is disposed of, e.g. sold to a broker, sold to an outlet, sent to landfill, etc. – Refurbish: similar to reconditioning but requires more work to repair the product. – Selling and redistribution.
A closed loop supply chain of Xerox New Assets AcquireRecoveryand repair New 1.2 billion $ Build Logistics Remain Asset strip cost Distribute Removal Deliver
A closed loop supply chain of Xerox New Assets AcquireRecoveryand repair New 1.2 billion $ Build Logistics Remain Asset strip cost Distribute Removal Deliver
Manufacturing & Supply• The company’s largest manufacturing site is in Webster, NY, where they produce fusers, photoreceptors, Xerox iGen and Nuvera® systems, components, consumables and other products.• They also have EA Toner plant located in Webster.• They have a facility in Venray, Netherlands, which handles supplies manufacturing and supply chain management for the Eastern Hemisphere• Master supply agreement with Flextronics, a global electronics manufacturing services company, to outsource portions of manufacturing for Mid-range and Entry businesses, continues through 2014.• They also acquire products from various third parties in order to increase the breadth of product portfolio and meet channel requirements.
Inventory management and logistics process vision Customer satisfaction is the key Demand driven supply chain Time to customer is a competitive advantage Common product language Complexity managed through high performance work systems Recycling is key
Order Satisfaction/ Delivery Management Shared ownership of orders Plan for order satisfaction Information availability exchange for inventory Same day delivery capability 100% build to order on high end
Configuration (Asset Information) Management One logical data base, SAP Co-ordinated, multifunctional, multinational, configuration management Rapid communication of configuration information
Logistics & Physical Distribution Planning One company, one integrated supply chain Networks optimize customer satisfaction at lowest cost & inventory Plan networks as a continuum from customer to supplier
Logistics OperationManage flow not stockPlan the workIntegrate warehousing and transportSame day delivery capability
Waste Prevention & Management Design products, packaging and supplies that make efficient WASTE FREE use of resources, minimize waste, reuse material where GOAL feasible and recycle what can’t be reused• Xerox’s Green World Alliance initiative provides a collection and reuse/recycling program for spent imaging supplies.• Xerox’s Product Takeback and Recycling program manages equipment at end of life.• Xerox is investing in technologies that reduce the creation of waste.• Example: – The solid ink imaging process utilizes compact “cartridge-free” solid ink sticks with no plastic housings or casings, thereby reducing print-related waste by up to 90% compared with comparable color laser products.
Waste Prevention & Management Central to the commitment to waste-freeGreen World Alliance Reuse program products Total Waste Diverted from Landfills from• This partnership with Xerox customers Cartridges, Bottles and Waste Toner through resulted in more than 3.4 million Reuse/Recycle cartridges, toner containers and other used supply items being returned in 2010.• Eco-Box returns allow the customer to order free bundles of Eco Boxes that hold from five to 12 cartridges per return, depending on the size of the item.• Xerox continues to monitor global customer feedback and industry best practices to stay on the path of continuous improvement.
Waste Prevention & Management Well-Established Collecting and Reprocessing Methods Xerox customers have three options for returning spent consumables to Xerox for reuse and recycling at no charge: Individual unit Eco Box returns for Pallet returns. program sale• Returned products are sorted, and items suitable for remanufacturing are cleaned, inspected and then remanufactured.• Those which cannot be remanufactured are recycled.• Remanufactured cartridges, containing an average of 90% reused/recycled parts, are built and tested to the same performance specifications as new products.
Waste Prevention & ManagementProduct Take-Back and Recycling• Xerox enables reuse according to the following hierarchy: – Reuse of complete end item as used or new, depending on the condition of the machine. This requires the least reprocessing, transportation and energy usage. – Remanufacturing or conversion into a newer-generation product or part Nearly 40% of machines returned in the U.S. are sent for remanufacturing of some sort. – Reuse of major modules, subcomponents, and parts for spares or manufacturing. In 2010, almost 200,000 parts were stripped off of used machines and sent back out to the field for reuse either in manufacturing or as repair parts. – Material recycling. Any remaining portion of a machine after the above processes have been followed is stripped of any recyclable material (e.g., plastics, copper wire) and material requiring special disposal services, such as PWBs, batteries and lamps. The remainder of the machine is then crushed and sent to a scrap metal reclaim facility.
Waste Prevention & Management Waste Diverted from Landfills through Remanufacture and Parts ReuseE-Waste•Xerox continues to operate its Europeantake-back program to enable equipmentremanufacturing and parts reuse• A waste vendor approval process assessesthe safety and environmental practices as wellas compliance history of each vendor.•Xerox does not allow its vendors to sendelectronic scrap to developing nations forprocessing.
Xerox –green supply chainIn 1991, the Xerox Corporation set a goal for the company tobecome waste-free. • Xerox cites a number of benefits of a waste-free company: • financial, • competitive advantage, • compliance • legislative regulation, • meeting customer requirements.Proactive leadership is Xerox’s stated goal in its environmental programs.All Xerox products are required, at a minimum, to comply with governmentstandards and meet Xerox’s internal environmental standards. Internal standards are frequently more stringent than existing legislativerequirements.
Process FlowProcess flowscomprises of:•Forward Flow•Reverse Flow•RemanufacturedFlows
Product recovery process• The product recovery process is as follows:1) Products are collected from Xerox customers and returned to one of centralized logistic return centers.• Reverse flows represent the movement of goods from the end-user to Xerox for disposition and reuse.2) Remanufactured flows are the movement of remanufactured goods from Xerox to customers.• The customers for remanufactured products are often not the same customers as for new equipment.• The flow of remanufactured goods is a forward flow of materials, not a reverse flow.
Product categorization for reuse• Returned units are inspected and assigned to one of four graded categories. These categories represent the most economically attractive use of the returned product. The grades are the basis for the reuse alternative .• Category 1 products are virtually unused machines requiring only minor servicing.• Category 2 machines are in good condition. These machines require parts and components to be replaced during the remanufacturing process.• Category 3 machines are in good condition, but not economically fit for remanufacturing. Therefore, parts and components are stripped off the frame of the machine and enter the reused parts inventories.• Machines are classified as category 2 or 3 based, in part, on the demand for remanufactured machine and the levels of reused parts inventories.• Category 4 machines are economically fit only for materials recycling.• The categorization decision is based on a variety of factors including: – the overall condition of the machine, – the age of the machine, – the demand for reused parts, and – current inventory levels of reused parts.
Results Greater visibility and more accurate data in the spare parts supply chain, allowing Xerox to improve the planning process and overall efficiency across its network Improved supply chain reliability and responsiveness, enabling Xerox to maintain its service commitments to customers. New process-driven, results-oriented management and the attainment of significant cost savings.Substantial savings across the supply chain: Transportation 16% Warehouse 12% Supply Chain 3% Total 15%
Key DifferentiatorsUnit Process optimization: multi cross functional teamProcess vision: IM & LProcess improvements in process: Cross functionality giving flexibilityManagement of Change: Convince people Converting understanding into positive perception Take the ownership and make people understand it’s the only way
Issues related to Reassemble-to-Order ProcessThe key dimensions in aggregate planning for a Reassemble-to-Order environment are :• Xerox Europe reported a total of 116,308 copiers returned in 1999. The majority of these units were returned from lease agreements.• The quality of these returns is difficult to predict, because not only are copiers complex but the condition of a photocopier is dependent on the intensity of its use and its age.• Through the use of the nominal grading system , Xerox is able to determine the most economic use of a copier—after the condition of the copier has been determined.• The use of Signature Analysis profiles aid the examiner in determining the reusability of a component.• The complexity of the remanufacturing processes is directly related to not only the number of part and components, but also the number of operations required to return each component to usable status..
Issues related to Reassemble-to-Order Process• Xerox tracks leases to enable the forecasting of the rate of product returns.• Product returns from leasing, for non-OEM remanufacturers, represent less than 5% of total returns.• Consequently, forecasting product returns is difficult due to the uncertainty associated with non-leasing returns.• Matching return rates and sales rates is difficult. The volume of returns in the case of value-added remanufacturing is significantly less than for container reuse.• Marketing is more complex for the remanufactured products, since customers may require significant education and assurances to convince them to purchase remanufactured products.
Managerial Concerns and Needs• Xerox Europe does not make remanufactured copiers to stock and have chosen to reassemble the required components and parts per each customer order.• Managers in a Reassemble-to-Order (RATO) environment have greater information needs, since the products, testing, and remanufacturing processes are significantly more complex than in a Remanufacture-to-Stock (RMTS) environment.• Further, these products are more expensive; therefore units awaiting disposition and inventoried components may represent a sizable investment. There may be multiple economic uses for a remanufactured component (e.g. spare or on a remanufactured unit), so inventory planning must take this into account.• The management of remanufacturing product and components must take into account the life cycle of the product in the field (likely demand for spare parts and consumables) and the market life cycle (likely demand for product in the future).• A successful production planning system must be capable of coping with the inherent complexities in this type of an environment. A disposal policy to balance supply and demand is an obvious concern.• Xerox continues to expand its consumable return programs. Most recently, a new program called the Green World Alliance is expected to increase worldwide return rates for retail and office products’ supplies.• The anticipated growth in product returns makes the development of formal planning systems crucial to ensure that product reuse programs continue to be value-added activities for Xerox.
Key concerns Design and implement a supply chain solution that minimizes the impact of significant operational constraints Standardize and modernize its spare parts supply chain with new business processes, systems and automation Maintain current service levels to its customers through the transition phase Build a continuous improvement culture that strives to increase supply chain efficiency Reduce operating costs
Solution Exel placed a supply chain management (SCM) consulting team in the Xerox organization Closing three regional centres and transferring operations to two existing locations Redesigning the two existing locations to manage increased product flow Integrating all systems and processes across the network Implementing new warehouse and transportation management systems